Singapore to seek $184 mil from Malaysia if HSR project derails

(File) Skyscrapers are pictured at dusk in Singapore's central business district December 30, 2009.

SINGAPORE says it has spent over S$250 million (US$184 million) for the high-speed rail (HSR) project with Malaysia and with the costs growing, the city-state would seek compensation if Kuala Lumpur decides to cancel the project, officials said on Monday.

Malaysian Prime Minister Mahathir Mohamad has said he was cancelling the HSR project to link Kuala Lumpur with Singapore. He said Malaysia would talk to its southern neighbour about any compensation it had to pay.

“Should Malaysia cause the HSR project to be terminated, we will deal with the question of compensation from Malaysia for costs incurred in accordance with the bilateral agreement and with international law,” Balakrishnan told parliament.

“The Singapore government has a duty to safeguard public funds by recovering these costs,” he said.

Transport minister Khaw said the total cost for Singapore had exceeded S$250 million as of the end of May and would grow rapidly with time.

Khaw said the costs incurred included land acquired for the project, setting up a government agency to handle the work and for the employment of officials there.

“The public statements made by the Malaysian ministers, and Prime Minister Dr Mahathir himself, on the termination of the project have not been followed through with any official communications to us,” Khaw said, as quoted by Channel News Asia.

Khaw added Singapore is “left with no choice” but to continue with its end of the agreement.

The project, valued by analysts at about US$17 billion and set to have been completed by 2026, would have cut travel time between Kuala Lumpur and Singapore to about 90 minutes from four or five hours by road now.

Mahathir, who led an opposition coalition to victory on the May 9 election, has made it a priority to cut the national debt and pledged to review big projects agreed by his predecessor that he says are expensive and have no financial benefit.

He has estimated Malaysia could cut almost a fifth of its US$250-billion national debt and liabilities by scrapping such big projects.